Report: South Dakota Second Best in Nation

Sales tax, public employees per 10,000 two biggest drags in otherwise clean bill of health

The 2014 edition of the American Legislative Exchange Council’s annual rankings of Rich States, Poor States showed South Dakota with improved marks over last year.

The Rich States, Poor States report uses 15 variables to come up with its rankings. “Generally speaking,” says the report, “states that spend less – especially on income transfer programs, and states that tax less – particularly on productive activities such as working or investing – experience higher growth rates.”

The state was 15th best in ALEC’s economic performance ranking and second best in the economic outlook ranking. Both were one-place improvements over last year’s 16th and third rankings, respectively. The state’s sales tax burden rating (40th) and public employees per 10,000 (30th) were the two biggest drags on the otherwise stellar report card.

Only Utah had better grades than South Dakota, which surpassed North Dakota (4th) and was miles ahead of other bordering states, Wyoming (10th), Iowa (25th), Nebraska (35th), Montana (43rd) and Minnesota (46th)